1. Conclusions Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Antony Walker Director, Intellect CEO Broadband Stakeholder Group

2. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Different yes, irrelevant no! Much to learn from both countries Innovation Take-up Enablers Inhibitors Business models Value and benefit

3. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Innovation Content genres similar to the UK: –music, games, video, community services, P2P applications, VoIP, e-Learning, e- commerce etc. Some services more advanced, incorporating more rich media Higher levels of take-up Could be approaching a tipping point

4. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Take up Market for digital content is growing rapidly Strong demand for personalised, interactive on- demand services and applications across a wide range of content genres. Online and mobile advertising revenues growing Continued trend towards user-generated content and social networking IPTV and mobile TV still in their infancy - not clear how consumers will adopt these services, but commercial interest is strong.

5. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Enablers Top down strategies – create investor confidence about government commitment Infrastructure competition - players seeking to compete through content Vertical integration - encouraged by regulators in the interests of sustainable investment Collaboration - between manufacturers and operators - developed platforms on which content developers can innovate. High-speed connections with high quality of service - essential trigger to the take up of new rich media services.

6. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Inhibitors The accelerated pace of change creating disruptive opportunities and threats for all Commercial uncertainty about business models, timing for market entry, technology choices, and the value of assets, delays investment Some players seeking to slow the pace of change as they reposition themselves Uncertainty about the regulatory framework for IPTV services has inhibited investment and delayed the deployment of services

7. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Business models Many services have succeeded with traditional subscription, advertising, or pay as you go business models. Games industry been most innovative - ‘Items selling’, now being developed by other sectors. Access to low cost micro-payment systems was a critical enabler for these models Games companies first to recognise revenue potential of communities and to monetize social networking services.

8. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Business models Larger operators focusing on ‘quadruple play’ services and fixed and wireless integration Some mobile operators moving to flat rate to encourage rich media take-up Uncertainty about biz models for mobile and IPTV services. Few believe subscription or advertising alone will be sufficient. Convergence is driving cooperation and alliances across the value chain, the acquisition of content assets by network operators, portals and ISPs and consolidation between operators.

9. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Market opportunity Despite significant growth, online or mobile distribution methods for digital content still only represent a very small percentage of total content sales by genre, suggesting that there is a huge opportunity for growth in these areas in the coming years. There are early signs in Japan of a growing interest in international and niche content, which could open up new opportunities for UK content companies.

10. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Social and economic change ICT is being prioritised as a key economic driver –Recognised implications of broadband enabled ICT for their economic and social development. –Measuring progress in this area and its direct and indirect contributions to society and GDP. ICT is being recognised as a driver of social change –Broadband and convergence are driving and enabling diverse social and societal change. –Emergence of new community social network services and the trend towards user generated content is shifting power towards the consumer / citizen. E.g. OhmyNews in Korea

11. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Visions are user centric U-strategies developed in close collaboration between government ministries, professional ‘think-tanks’, trade associations, technology suppliers and network operators. Although, supplier led, both attempt to be ‘user centric’ - putting user benefit and experience at the centre of policy and strategy. More forward looking, longer-term and visionary than European strategies and i2010

12. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Payment, identity and trust Critical enablers for innovation and growth and will become increasingly critical in a networked society. This is an area where government can play an important role in working with the industry to ensure a benign user environment in the ubiquitous networked society.

13. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan NGA – leap of faith Fibre deployment expensive and ambitious No evidence of a clear business case Believe demand for bandwidth will grow and that new services require guaranteed QoS in the access layer Unlikely that operators would have come to this conclusion without strong government and supplier backing Policy makers and suppliers focused on export potential of international markets

14. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan China Japan and Korea are responding to China –Korea and Japan feel the heat of competition from China’s burgeoning economy more acutely than we do in Europe. –Aware of China’s scale impact on the ICT sector –Prioritised ICT leadership and exploitation as part of their strategic response to China’s growing economic and political influence.

15. Recommendations Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan

16. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan EU Comms Framework Review – DTI/ Ofcom Strong trends towards vertical integration and consolidation in Korea and Japan Regulatory approaches being taken in these markets should be assessed in more detail Determine whether they offer useful lessons that could be applied in the current review of the EU framework.

17. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Establish UK Digital Readiness Index – ONS. There is a measurement philosophy in Korea and Japan – what gets measured gets done. The UK should establish effective metrics to assess the UK’s digital readiness.

18. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Focus on payment, identity & trust – DTI In an increasingly networked society, the challenges of ensuring a safe and trusted user environment will increase. UK government and industry should be enhancing their collaborative efforts now, to address issues that will be critical to consumers in five years time.

19. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Strategic initiatives a.Review options for Next Generation Access (NGA) deployment and publish a plan – DTI/ BSG. –The UK will need to develop its own mid- to long- term route map for the evolution towards NGA in the UK. b.Digital health for patient-centred care – DTI/DOH –Although not the primary focus of this mission, there are clearly significant and economic and social benefits to be gained from the diffuse application of ICT in patient centred-healthcare. More could be learned form the Asian experience in this area

20. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Strategic initiatives c.Connected car and connected roads KTN – DTI/DOT –Both Japan and Korea are seeking to exploit the application of ICT in transport for economic, social and environmental benefit. A connected cars initiative in the UK could build on the recent Intelligent Networks Foresight study. d.Digital Olympics challenge – DTI/DCMS/ IAP The relevance of the Ubiquitous Networked Society Vision should be considered in the context of 2012 Olympics.

21. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Follow-up missions on IPTV – Intellect Many forms and flavours of IPTV services are emerging in Japan and Korea. Consumer reaction to these services and the evolution of the related business models will be instructive for UK players Follow-up mission in this area would be valuable for UK companies.

22. Global Watch is a DTI service managed by Pera Exploiting the broadband opportunity: lessons from South Korea and Japan Review the impact of China– DTI/FCO The strategies being developed in Japan and Korea are, in part, incentivised by a recognition of the potential impact that China will have on the global ICT market. DTI should consider undertaking a review of the strategic impact of China on the UK